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Timing of Funds

We understand that ARP funds must be “obligated” by 2024 but expended by 2026. What specifically meets the definition of “obligated”?

The Treasury Department’s May 10, 2021 Interim Final Rule “adopts a definition of ‘obligation’ that is based on the definition used for purposes of the Uniform Guidance, which will allow for uniform administration of this requirement and is a definition with which most recipients will be familiar.”[1]

As such, pursuant to 2 CFR § 200.71, “obligations means [sic] orders placed for property and services, contracts and subawards made, and similar transactions during a given period that require payment by the non-Federal entity during the same or a future period.[2]

The Interim Final Rule also notes that “[a] recipient must return any funds not obligated by December 31, 2024, and any funds not expended to cover such obligations by December 31, 2026.”[3]

Last Revised: May 27, 2021

[1] U.S. Department of the Treasury Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule, 31 CFR Part 35 RIN 1505-AC77, §35.6 at 98.  See Also regarding obligation: “Obligation means an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment.” Id. at 134.)

[2] Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR § 200.71 – Obligations, available at: https://www.law.cornell.edu/cfr/text/2/200.71.

[3] U.S. Department of the Treasury Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule, 31 CFR Part 35 RIN 1505-AC77, §35.6 at 138.